Freeview expanding in tough ad market

Freeview says new digital channels are on the horizon despite the advertising slump.

Free television faces an uncertain future because its main revenue source - advertising - has fallen rapidly in the economic downturn.

Free TV, like other traditional media, is adapting to a revolutionary shift in the way people use media and unfettered growth at pay television giant Sky TV.

Yet Freeview general manager Sam Irvine insists that now is a good time to start a free-to-air TV channel.

"Three or four" operators were looking at joining either Freeview's digital satellite or digital terrestrial platform.

And he saw future prospects for pay TV channel to move to Freeview, as happened in Britain.

Irvine said one of the proposals under discussion was advanced. The main negotiations are with the State-owned transmission company Kordia which sells capacity for independent channels to join Freeview.

The Freeview company itself - dominated by TVNZ and MediaWorks - controls access to the electronic programming guide and has no real powers to shut new players out.

But new channels might expect a mixed reception from Freeview incumbents.

More channels will be welcomed, making the free-to-air digital platform more attractive, helping counter the growing power of Sky and digital TV, and hastening the day when analogue signals are switched off.

On the other hand key players - TVNZ and MediaWorks - will be reticent about more free channels funded from the diminishing advertising revenue.

Freeview currently has 13 channels and Freeview believed the country could sustain 18 to 20. On July 15 Freeview estimated 255,048 decoders had been sold, a figure that suggests it may be in 16 per cent of homes.

Of those 167,328 are on satellite, up 11,846 from the last quarter and 87,720 on terrestrial which offers high definition signals, up 17,061.

That compares with more than 706,181 subscribers to Sky digital and and a total 748,546 or 46 per cent of the country.

With digital TV now in more than 62 per cent of homes the Government is planning to switch off analogue TV signals by 2015 or earlier.

Despite earlier emphasis on Freeview as an alternative to Sky TV, Irvine insists that its focus is to make people aware there is more content on free TV and a better quality picture.

Delay in Sky TV putting its free-to-air channel Prime TV on to Freeview - despite calls from Broadcasting Minister Jonathan Coleman - is slowing uptake for the free-to-air platform.

Sky says it is delaying due to costs but free TV advocates say Freeview with more channels might affect the number of people signing up for Sky subscriptions.